June 22 (Bloomberg) -- Chrysler Group LLC says traffic
delays at the Canada-U.S. border are driving up costs for the
world’s seventh-largest carmaker, which sends 2,000 finished
cars and trucks a day across an 83-year-old bridge linking
Detroit to Windsor, Ontario.

Canadian Prime Minister Stephen Harper wants to change
that, announcing an investment of at least $550 million to build
a bridge to speed shipments across the busiest commercial border
crossing in the world’s biggest trade relationship.

“The name of the game with respect to our manufacturing
operations is just-in-time inventory, not just-in-case inventory
delivery,” said Reid Bigland, chief executive officer of the
Canadian unit of Chrysler, majority owned by Fiat SpA, in a
telephone interview.

While the Canadian government has spent much of the last
decade lamenting the country’s reliance on the U.S. economy and
seeking stronger trade links with Asia, the proposed bridge
shows cross-border business is increasing.

Canada’s exports to the U.S. rose in the first quarter to
their highest level in three years, with the U.S. accounting for
73 percent of total shipments. That share touched a record 85
percent in 2001.

The span would supplement the Ambassador Bridge, which has
connected the two cities since 1929. More than C$130 billion
($127 billion) in shipments and 8,000 trucks cross the Detroit-Windsor border each day, according to Canadian government data.

‘Unnecessary Costs’

The crossing carries 25 percent of truck commerce between
the U.S. and Canada and more than 7 million vehicles a year,
according to the Public Border Operators Association.

Delays in sending shipments across the existing bridge have
added “unnecessary costs” for automakers, Bigland said.

Sales to the U.S. by Linamar Corp., a parts maker based in
Guelph, Ontario, increased 29 percent last year to C$188
million. While U.S. revenue has increased, some automakers have
cited bottlenecks at the crossing as a drawback to sourcing
supplies in Ontario, said Mark Stoddart, chief technology
officer and executive vice president of marketing at Linamar.

“We have had customers indicate to us that the bridge
issue is a concern that they have in sourcing Linamar,”
Stoddart said by phone.

Harper, who has urged the construction of pipelines to ship
oil and gas to Asia, called the bridge the “most important
piece of international infrastructure that this government will
complete while I’m prime minister.”

Outright Drag

“We are prepared to do everything in our power to make it
happen on the Michigan side,” he told reporters at a news
conference June 15 in Windsor.

Trade has been a diminishing source of growth for Canada
for more than a decade, becoming an outright drag since 2005, as
a rising dollar and cheap imports from China prompted Canadians
to buy more goods from abroad.

President Barack Obama and Harper in December agreed to
take steps to speed the flow of goods and people across the
border in a bid to counter weakening trade ties.

Border regulations cost Canadian businesses about C$16
billion annually, the Canadian government estimates.

Harper has said exporting more to China became a “national
priority,” after Obama rejected Calgary-based TransCanada
Corp.’s $7 billion Keystone XL pipeline to ship Canadian oil to
U.S. refineries on the Gulf of Mexico.

Charging Tolls

Canada was invited to join nine nations, including the
U.S., negotiating a Pacific-region trade agreement, Harper said
June 19. The Trans-Pacific Partnership agreement “will enhance
trade in the Asia-Pacific region and will provide greater
economic opportunity for Canadians,” Harper said in a
statement.

Economic ties between China and Canada remain lopsided.
Canada’s trade deficit with China was C$152.11 billion from 2007
to 2011, according to Industry Canada data.

“Diversification means you sell more to others,” said
John Manley, president of the Canadian Council of Chief
Executives in a phone interview. “It doesn’t mean you sell less
to your biggest customer.”

The complete bridge project, including customs plazas on
either side of the border, is estimated to cost C$3.5 billion to
C$4 billion, Transport Canada spokesman Patrick Charette said in
an e-mail. Canada has committed as much as $550 million to pay
for infrastructure on the Michigan side of the bridge, and costs
for other parts of the project are “‘still being refined,’’
Charette said. Michigan isn’t providing any funding.

Bridge Opposition

Tolls collected on the Canadian side will be paid to the
private company that will design, build and operate the bridge.
Part of the tolls will help the Canadian government recoup its
investment, Charette said.

Michigan has ‘‘gone through many difficult years,’’
Governor Rick Snyder told reporters June 15. ‘‘We aren’t in a
position to do this. They’re reaching out to help us,” he said
of Canada.

Manuel Moroun, the billionaire owner and operator of the
Ambassador Bridge, has opposed a publicly financed competitor.
Canadian officials and Snyder have been championing construction
of a second bridge amid resistance from some Michigan lawmakers
and Moroun, 85, who wants to build his own adjoining six-lane
span.

“Beyond a press event, the governor needs to make his best
case for his government bridge,” said Mickey Blashfield, head
of government relations for Detroit International Bridge Co.,
the company that runs the Ambassador Bridge.

Lobbied Lawmakers

Moroun has lobbied lawmakers and funded television ads
labeling a publicly funded bridge a boondoggle. Moroun bought
the controlling interest in the bridge company in 1979,
outbidding Warren Buffett, the billionaire chairman of Berkshire
Hathaway Inc.

“This is a battle that’s been won. It’s not the war. We’re
faced with a very powerful, wealthy entrenched interest that
will do everything legally and politically possible to block the
new crossing,” said Perrin Beatty, president of the Canadian
Chamber of Commerce in a phone interview June 15.

The new bridge may create more crossing capacity than the
region needs in the near term, Fitch Ratings said in a research
note June 18. Traffic patterns on most U.S. cross-border bridges
have been declining since 2000, the credit-rating company said.
Still, it “may position the region for increased trade traffic
over the medium and long term,” it said.

Construction will provide about 12,000 jobs annually for
each of the four years it will take for the structure to be
built, the Center for Automotive Research said in a study
released June 14.

The Michigan Manufacturers Association in Lansing, the
Consulate General of Canada in Detroit and the Detroit Regional
Chamber helped fund the study, according to the Ann Arbor,
Michigan-based researcher.

‘More Competitive’

“Any ease of moving goods from one place to the other only
decreases cost and makes us more competitive in North America,
so that’s the way we look at it,” said Mark Reuss, President of
GM North America, a unit of General Motors Co.

The four-lane Ambassador was completed in 1929 by banker
Joseph Bower. At 7,490 feet (2,283 meters), it was the world’s
longest suspension bridge at the time, according to the bridge’s
website.